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Athens: Illegal markets in a disintegrating city

Written by Effi Lambropoulou on .

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HoodiesGreece’s debt crisis, shrinking economy, surging unemployment and the continuous waves of illegal immigrants have transformed Athens, once considered one of Europe’s safest capitals, into a city with a growing public sense of insecurity.[i]

Here we refer only to some findings from a middle scale research which has been carried out since January 2011 in an Athenian community.

Today, a part of the city centre of Athens is actually being divided into 'sectors of influence'[ii] by several criminally-involved immigrant groups, while two out of seven Athenian communities are largely controlled by organised crime. Next to the centre and in an axis of approximately two kilometres, previously bourgeois quarters have been gradually 'colonised' by 'legal'-illegal immigrant groups with the support of certain locals and in particular real estate 'gangs' and proprietors, bookkeepers, civil engineers and lawyers.

The occupation and the carrying out of several of these immigrant groups’ daily activities in the public squares and parks in this area have 'pushed' the native inhabitants into their houses and apartments leaving the coast clear for the rest. Furthermore, the number of Greek neighbourhood residents in these Athens areas is dwindling more and more. According to National Statistical Office, 133,386 permanent inhabitants (also known as 'usual residents') left the municipality of Athens during the last ten years (2001-2011).[iii] For years now, with the inertia of Greek governments, this deteriorating situation has occurred relatively quickly during the massive influx of illegal immigrants, mostly from the Middle East, Southeast Asia and Africa.

Governmental and local schemes have been set up in the summer of 2010 to work together on an action plan to revamp the centre of Athens, as residents and business owners intensify complaints about the impact that crime and illegal immigration are having on the area.[iv] Unfortunately the situation hasn’t changed at all.

In particular, since 2009, there has been an apparent increase in the Bangladeshi and Pakistani presence and entrepreneurship in the Athens city centre and the surrounding communities. The majority operate internet and call shops, shops with cell phones and accessories, electronic devices and money transfer, usually all in one, mini markets and barber shops.

Moreover, Africans are mostly vendors of illegal items originating from China (bags, glasses, umbrellas, etc). In addition, they participate in drug trafficking, in the inner-city and in the community of our research as well. Africans also operate a large number of bars, while African women’s beauty and hairdresser’s shops are also fronts for illegal prostitution and, according to the inhabitants, drug smuggling. 

We found out that 13.5 percent of the 207 shops and enterprises of the third-country nationals in the research area that includes two well-known squares and 19 small–middle building blocks, are bars and pubs, 29.4 percent internet and call shops [n1=46], cell phones and accessories, electronic devices and money transfer shops [n2=15], 22.7 percent are mini markets, 14.5 percent barber shops, hair salons and beauty parlours, 7.7 percent clothing apparel, bags, shoes (illegal), while 12.1 percent  houses of worship, clubs and associations (n1=8), as well as various services (n2=17) such as translations, typewriting, legal aid-attorney, a nursery school, dormitories and brothels. The rate of foreigners’ shops in the area corresponds to 33.3 percent of the business activity; over 22.5 percent (140) of the total number of Greek shops (621) have closed between May 2011 and May 2012 (less than 500 were operating in December 2011).

Contrary to what was initially expected, there is only a slight geographic division of labour regarding the offered goods and services, with certain enterprises being over-represented in relation to the rest.

However, the rising number of internet shops as well as of other small shops is provocative while the demand and the apparent profits cannot be a good reason for their opening. For example, in a span of 50 metres three internet shops operate, while a few metres further down, three mini markets are all in a row, and the communication costs in the call centres via Skype etc is 0.50 € per hour. Since many of the foreigners have laptops and the squares of the region have free wifi access, while all of these people have at least one mobile, the density of the internet shops cannot be justified.

It is also interesting that the owners of the internet shops are Bangladeshi and Pakistanis, while the vast majority of their clients are Africans. Furthermore, the law requests the documentation of at least 60,000 euro in a bank account for an applicant originating from a developing country to start a new enterprise (Law 3386/2005, Art. 24[4a]). The question is where they get so much money from, if they have it, since the majority have spent a maximum of two to three years in the country and are considered 'poor refugees'.

In order to operate an internet shop, as well as beauty shops, hair salons, cafés, bars, pastry shops, bakeries, etc., several conditions must be met (toilette, fire exit, etc.). The community authorities need to provide a pre-registration after the owners have submitted certain control certificates carried out by other services, i.e., urban planning, fire department and hygiene inspectorate. However, during our research we noticed that the preregistration of the shops of the third-country nationals was formal and swift, restricted to the examination of the necessary documents, while for the rest, mainly Greek nationals, it was very detailed and strict, as it should be. Apart from that, the local authorities often accepted the partial submission of their papers, didn’t seal up the shops operating without registration, even a year or more, before the application, or when they repeatedly violated the law, giving them successive opportunities to conform, violating the spirit of law itself.

All in all, the whole state-control mechanism and primarily local authorities show high tolerance of such illegal practices by citizens of third countries, unless local police lodge a complaint or Greek shop owners, residents’ unions, or separate persons object to the licence (and the operation) dynamically, by all legal means available. Such objections were not the case until the beginning of 2011, when the permanent residents started reacting in a more organized manner. The foreign entrepreneurs invent several forms to cover their entrepreneurial activities and bypass such 'difficulties', in order their operation to start immediately and run smoothly.[v]

The shop manager is not always the real owner, but the front man. The shops occasionally have mobile phone numbers, so the alleged owner or the contact person can be anywhere in the country or elsewhere; they also use local phone numbers from other Athenian neighbourhoods indicating that the enterprise is coordinated from another region or, the most probable, that the shop cannot have a local number. This happens when the applicant does not have the adequate documents (e.g. bills, identity card etc.), or s/he has unpaid charges to public or local services. From the municipality of Athens (Division of Shops and Performances and the Quality of Life Committee) and the Hygiene Inspectorate of the Attica region we surprisingly identified that under the same name were several enterprises of the same kind, such as internet shops, beauty shops, hair salons or bars. From the 207 foreigners’ shops, 25 (12%) shops in the community under examination are owned by eleven entrepreneurs; from them a person has already four shops (three in the community and one in the neighbouring one).

In such shops money transfer is carried out by relevant companies (Western Union, Money Gram etc.); additionally, in the same shops money transfer is carried out informally, hand to hand, but mostly virtually. In the community, at least two owners of these shops defrauded their clients and disappeared. It is also widely known that the informal value transfer systems (IVTS)are very attractive to the migrant workers and their families who are heavily involved in sending and receiving remittances.[vi] This also applies to Greece, and has come to the knowledge of the law enforcement authorities. The most well known informal value transfer system is hawala, which is widely used by the Muslim immigrant communities in Greece,[vii] as eventually elsewhere,because the transfers are not effectively regulated by governments.[viii]

Hawala is distinguished between white and black. 'White hawala' is used to refer to legitimate (source and intent) transactions, while 'black' refers to illegitimate transactions, specifically hawala money laundering.[ix] In investigating hawala money laundering, it has been found that even 'basic' hawala transfers can be difficult to trace back to the original criminal source of the transaction, since they leave a thin or confusing paper trail if any.[x]

An example of how this mechanism works is the following: A Pakistani worker in Greece wants to send money to his family in Pakistan. To do this he will establish contact with a broker, who will arrange the transfer. The worker pays in euro, dollars or other convertible currencies. The broker in Greece contacts his/her colleague in Pakistan, who pays the money to the family of the worker in local currency. Notably, in this case, money has never crossed the border. The transaction is based on communication and trust between the intermediaries, which guarantees the debt and keeps the whole system working.

Hawala is not the only method for money transfer though; a wide range of methods and networks operate in similar ways and offer comparable services (e.g. charities, internet-based payments/transfers stored value, such as pre-paid telephone cards debit and credit cards used by multiple individuals brokerage accounts). Other communities, such as eastern Europeans tend to make greater use of hand-carrying of cash or kind (themselves or by a trusted relative or friend) or courier services. Similarly, Albanian immigrants in Greece, according to older research,[xi] “often return home with substantial accumulated savings at the end of a period of working, rather than entrust the funds to someone else; sometimes, however, they will trust a friend or relative to take the funds back home”.[xii] The transfers back to their home countries made by immigrant community households in Greece are not captured in any national database, except for the World Bank’s. Thus, according to the World Bank’s data (2010),[xiii] the outflows in 2008 were US$1,912 billion, in 2009 US$1,843 billion and in 2010 US$1,932 billion, which is €1,45 billion as written in the Greek Press.[xiv] Albania’s share in outflows was the highest with US$599 million for 2010; other countries with high shares in outflows from Greece were: Poland, Bulgaria, Ukraine, Romania, Pakistan, China and India.[xv]

UK research has also shown that certain ethnic groups (e.g. Afghanis) are quite suspicious of the method. Thus, it is clear that the trust which remitters and receivers have in the informal transfer, may only apply where the IVTS is an established system with experienced players. The report, in conclusion, underlines that the informal transfer system is constantly changing, and transfers via IVTS are only part of a much larger international flow of funds. [xvi]

The issue is how these informal transfers and alternative systems can be prevented from being abused by criminals, terrorist organizations for their funding and those who wish to launder money (e.g. from drug trafficking, alien smuggling).[xvii] There is increasing pressure, both in the sending and in the receiving countries, to regulate more rigorously, and even to criminalise, the informal transfers.[xviii]

The illegal migrant flow in Greece, the forged documents used and the absence of a database should worry the authorities for unreported incomes of these groups and the 'underground' economy –the illegal and criminal part.

Summing up, a part of Athens’ city centre, traditionally inhabited until the late 1980s by the upper middle class, has rapidly developed into a no-go area, the second in the city’s 'heart'. The enterprises are growing in interaction with each other and the area is methodically becoming materially and economically controlled by the foreigners dealing in food supply, clothing and apparel, beauty, communication, praying and churchgoing, expelling the locals and their enterprises. Several NGOs and other state organisations offer diverse support, such as for health and hygiene issues, meal provision, etc. to the rotating newcomers. In the mean time the drug scene is expanding and attracting more people, prostitution is more widespread, the public spaces are deteriorating, lawlessness is establishing itself and soon, the situation will become difficult to control, unless state and local government decide to intervene efficiently. 

What have Greek authorities learned from comparable situations in other European countries with high rates of Asian and Muslim populations? Unfortunately, this remains an open question. Recent research and Institutes’ reports all over Europe[xix] have pointed out that the 'no-go' areas are the by-product of decades of multicultural policies that have encouraged Muslim immigrants to create parallel societies and remain segregated rather than become integrated into their European host nations. Contemporary integration policies emphasize social-cultural assimilation of migrants as opposed to multiculturalism, which was the earlier focus. In Athens, it is interesting to note that a growing deliberate segregation is confirmed, which the politics of the local government not only prevent but also support, unless the tolerance of the authorities towards deviant practices and various (sometimes unacceptable and unreasonable) demands is a way for the integration of this population.


[i] Los Angeles Times (31.05.2011). “Crime casts long shadow over Athens”, by Anthee Carassava.

[ii] Michaletos, I. (15.05. 2011). “Organized crime in Greece: Statistics, trends and police countermeasures in 2011”, Balkanalysis.com. Greece; KI.PO.KA. Citizen movement for the centre of Athens, Athens, Crime Chart, only available at: http://www.enet.gr/?i=news.el.article&id=163357. [el]

[iii] NSSG-National Statistical Service/ELSTAT (2011). Population/Usual residence population. [el]

[iv] Athens Plus (23.07.2010). “Fresh bid to clean up Athens”, The International Herald Tribune & Kathimerini 109: 1, 2, 4-5, 11.

[v] E.g. by adding electronic devices and mobile phones, clothing etc., to the shop, which have no special prerequisites. Thus, at the front they sell mobiles and other items, such as blankets, suitcases etc. and at the back they have PCs for internet use, as well as phone booths.

[vi] For the UK, Blackwell, M. & Seddon, D. (March 2004). Informal remittances from the UK. Values, flows and mechanisms. A report to Department for International Development (DFID), Overseas Development Group Norwich, p. 11.

[vii] Michaletos 2011a, op.cit.

[viii] Daily News - Sri Lanka’s National Newspaper (27.10.2011). “Shadow money transfers”, by Sher Azad.

[ix] Passas, N. (2004). “Indicators of hawala operations and criminal abuse”, Journal of Money Laundering Control 8(2): 168-172.

[x] Jost, P.M. & Singh Sandhu H. (2003). The hawala alternative remittance system and its role in money laundering, Financial Crimes Enforcement Network (FinCEN) Vienna VA & Interpol/FOPAC Lyon (http://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf).

[xi] Korovilas, J.P. (1999). “The Albanian economy in transition: The role of remittances and pyramid Investment Schemes”, Post-Communist Economies 11(3): 399-415 [404-405].

[xii] Blackwell & Seddon 2004: 13, op.cit.

[xiii] [The] World Bank (November 2010). Bilateral migration and remittances 2010, Excel Datasets.

[xiv] adesmeytos Typos (19.06.2010). “The immigrants sent home tax-free 1.45 billion euro” (http://www.adesmeytos.gr/news.php?aid=16153); Demokratia (28.11.2011). “The immigrants sent home tax-free 1.45 billion euro” (http://www.dimokratianews.gr/node/3659). [el]

[xv] World Bank 2010, Tables 3, 4, Bilateral Migration Matrix “Bilateral remittance estimates using migrant stocks, destination country incomes, and source country incomes”. See also Ratha, D. & Shaw, W. (2007). South-South migration and remittances, World Bank Working Paper no. 102, The World Bank: Washington, D.C.

[xvi] Blackwell & Seddon  2004: 13, 23, op.cit.

[xvii] Work Group of the Centre of Mediterranean, and Middle-East [and Islamic] Studies (KE.M.ME.S) of the Institute of International Relations (IDIS). Newsletter for Middle-East and Mediterranean, January 2006, Issue 8, Middle East Bulletin, “Hawala and charitable organisations: a system of transactions and solidarity or mechanism of financing terrorism?”, pp. 2-3; see also Passas, N. (2003). “Financial controls of terrorism and informal value transfer methods", Siegel, D., van de Bun, H. & Zaitch, D. (eds.), Global organized crime. Trends and developments, 149-158, Kluwer: Dordrecht (The Netherlands).

[xviii] TamilCanadian.com (29.05.2005). “Regulating money transfer services may force them underground, Ottawa told”, by Jim Bronskill.

[xix] For example, the Stonegate Institute, a not-for-profit, non-partisan policy organization carrying out research and analysis that promotes global security, prosperity and freedom in human rights, defence, international relations, economics, culture, science, technology and law, addressing to human rights activists, moderate Muslims and expert investigative reporters.